Settlement agreement reached in CHI Franciscan antitrust case .

Orthopaedics

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TACOMA — A lawsuit filed by the state that alleged partnerships between Harrison Medical Center parent company CHI Franciscan and two Kitsap physicians groups were illegal and hurt consumers will be settled, according to court records. 

A trial in the case was scheduled to begin Tuesday before Judge Benjamin Settle in U.S. District Court for Western Washington in Tacoma. On Friday, the trial date was stricken "pursuant to notice from the parties that this matter is resolved," according to records. The parties were given until April 29 to file "dismissal/settlement" paperwork. 

In a statement, CHI Franciscan vice president for communications Cary Evans said the settlement would ensure CHI Franciscan's affiliations with WestSound Orthopaedics and The Doctors Clinic remain in place.  

"This is good for patients and doctors on the peninsula, keeps our highly skilled doctors in our community, and ensures everyone has access to great care close to home," Evans said. 

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No additional details on the settlement agreement have been released. Attorney General's Office representatives were not available to comment Friday. 

The two deals challenged by the state were formalized months apart in 2016. In July 2016, Tacoma-based CHI Franciscan acquired WestSound Orthopaedics, a Silverdale practice with seven physicians. In September, CHI Franciscan announced a professional services agreement with The Doctors Clinic, a physicians group that operates a network of clinics across Kitsap.

Under the agreement, The Doctors Clinic remained an independent corporation but provided services exclusively to CHI's Franciscan's Franciscan Medical Group. CHI Franciscan also bought The Doctors Clinic's surgery, laboratory and imaging centers. 

The state Attorney General's office filed a complaint against CHI Franciscan, The Doctors Clinic and WestSound in August 2017, claiming both agreements hurt consumers by limiting choice and steeply increasing rates for services. It asked the court to unwind the deals and award compensation. 

The complaint argued the affiliation agreement between CHI Franciscan and The Doctors Clinic constituted a price-fixing scheme that violated federal and state antitrust laws, which prohibit arrangements between entities that restrain trade. It also alleged CHI Franciscan's acquisition of WestSound Orthopaedics was an illegal, anti-competitive merger. 

In an order filed March 1, Judge Settle found the state failed to support its claim that the WestSound acquisition hurt competition and granted the defense a summary judgement. The trial set to begin next week would have focused solely on the state's claim that CHI Franciscan's agreement with The Doctors Clinic violated antitrust laws.